ORDER Paripoornan, J. 1. This is an application under S.155(2) of the Companies Act, 1956. The petitioner purchased 705 equity shares in the 1st respondent company from the 2nd respondent. The 1st respondent is a Private Limited Company, incorporated on 13th October 1966, having its registered office at Kallai Road, Calicut. By Ext. B-1(A-2), dated 10th November 1981 the 1st respondent company was informed by the 2nd respondent about the sale of 705 shares to the petitioner and requesting the transfer of shares in the name of the petitioner. By Ext. B-2 (A-3), dated 1st December 1981 the 1st respondent rejected the said request relying on Art.33 of the Articles of Association of the Company. The petitioner avers that by Ext. A-4, dated 14th February, 1982 [Ext. A-4 (B-3)] the 2nd respondent wrote to the 1st respondent expressing a desire to dispose of the shares at the price of Rs. 100 fixed by the company to a member of the company and desired to take urgent steps in the patter. The company did not find any person as enjoined by Article 39 of the Articles of Association. By Ext. A-13, dated 29th July 1982 the 2nd respondent wrote to the 1st respondent intimating that in the absence of a reply for Ext. A-4 (B-3), dated 14th February 1982 she has sold the shares to the petitioner, acting in conformity with Art.39 of the Articles of Association. There was no reply from the company. The company could not find any purchaser for 705 shares and so intimated the 2nd respondent accordingly by Ext. A-5, dated 11th November 1982. By Ext.A-6, dated 15th November, 1982 the 2nd respondent intimated the 1st respondent that she has transferred the shares to the petitioner and handed over the share transfer forms duly filled in to the petitioner and requesting the company to register the transfer in the petitioner's name, on his furnishing the share transfer forms with similar request. The petitioner made a request on 19th November 1982 evidenced by Ext. A-7 along with Ext. A-6. This letter was delivered along with the share transfer forms duly filled in and stamped and delivered to the 1st respondent on 20th November 1982 (Ext. A-8). It is the petitioner's case that the 1st respondent is bound to register the shares in the petitioner's name under Article 39 of the Articles of Association. It did not do so. A-6. This letter was delivered along with the share transfer forms duly filled in and stamped and delivered to the 1st respondent on 20th November 1982 (Ext. A-8). It is the petitioner's case that the 1st respondent is bound to register the shares in the petitioner's name under Article 39 of the Articles of Association. It did not do so. On the other hand, by Ext. A-9 (B-8), dated 24th December 1982 the 1st respondent, intimated the 2nd respondent and the petitioner, rejecting the transfer application. It was returned. In so doing, the 1st respondent acted illegally. The decision to reject the petitioner's application for transfer is totally unwarranted. Clause 40 of the Articles of Association has no application to the instant case. The petitioner was entitled to get the shares transferred in his name by virtue of Article 39 of the Articles of Association. On these grounds, the petitioner prays that this court may be pleased to direct rectification of the register of shareholders of the 1st respondent company by substituting the name of the petitioner as the holder of 705 shares described in the Annexure A of the petition in the place of the 2nd respondent. 2. The 1st respondent has filed a detailed counter. Exts. B-1 (A-2) communication, dated 10th November 1981 and the reply thereto Ext. B-2 (A-3) are admitted. It is averred that the shares could not be transferred in. view of Article 33 of the Articles of Association of the Company. The 1st respondent received Ext. A-4 (B-3), dated 14th February 1982 only on 24th September 1982. The company sent circular to all the members on 7th January 1982 intimating that the 2nd respondent was willing to sell 705 shares at the rate of Rs. 100 per share. One Premkumar expressed willingness to accept the shares. The signature in the said letter was doubtful. On 11th November 1982 the company wrote to Premkumar to confirm the address, to verify that the offer was from Premkumar. At the same time by Ext. A-5 the 2nd respondent was informed that no shareholder was interested to purchase the shares. On 19th November 1982 by Ext. A-7, the petitioner wrote to the company (enclosing Ext. A-6, dated 15th November 1982, communication by the 2nd respondent) requesting for transfer of 705 shares held by R-2 in her name. The petitioner undertook to produce the share certificates on being informed. On 19th November 1982 by Ext. A-7, the petitioner wrote to the company (enclosing Ext. A-6, dated 15th November 1982, communication by the 2nd respondent) requesting for transfer of 705 shares held by R-2 in her name. The petitioner undertook to produce the share certificates on being informed. It was finally by letter, dated 24th December 1982 by Ext. A-9 (B-8) the 1st respondent informed the petitioner as also the 2nd respondent about the resolution of the company, dated 18th December 1982 rejecting the transfer application. It is the 1st respondent's case that on a fair and proper reading of the Articles of Association, the petitioner's case, based substantially on Art.39 of the Articles of Association is unsustainable. The petitioner had not sent along with the letter, Ext. A-7 (enclosing Ext. A-6), dated 19th November 1982, the share certificates which were alleged to have been transferred in his name nor did he remit Rs. 2 for registration as required by Art.41. Under S.108 of the Companies Act read with Art.41 of the Articles of Association compliance there of is mandatory. Failure to do so is fatal. The interpretation placed on Art.39 of the Articles of Association, in isolation, and without reference to Art.40 and 41 is untenable. The communication of the 2nd respondent, purporting to be notice under Article 39, dated 14th February 1982 (Ext. A-4/B-3) was received by the Company only on 24th September 1982 and the period of three months will expire only on 24th December 1982. The application for transfer from the petitioner (Ext. A-7) was received on or about 19th January 1982, even before the expiry of the period mentioned in Art.39. Art.39 of the Articles of Association is inapplicable to the instant case. The petitioner is not entitled to have the transfer effected in the register, by virtue of the said Article. Ext. A-5 decision, dated 11th November 1982 conveyed to the 2nd respondent was cancelled by Ext. B-7 on 14th December 1982. The letter, dated 14th February 1982 was not received before 24th September 1982. The Company had not received any reminder on 29th July 1982 (Ext. A-13) as alleged. The company had rejected the application of transfer under Article 40 of the Articles of Association. In such a case Article 39 is inapplicable. The period of three months contemplated in Article 39 had not expired. The Company had not received any reminder on 29th July 1982 (Ext. A-13) as alleged. The company had rejected the application of transfer under Article 40 of the Articles of Association. In such a case Article 39 is inapplicable. The period of three months contemplated in Article 39 had not expired. Reading Art.39, 40 and 41 together, the claim made by the petitioner is untenable and the prayer in the petition cannot be allowed. The decision of the Board of Directors conveyed as per Ext. A-9 (B-8) was taken "bona fide", considering all material facts and circumstances and also taking into account the interest of the company and the interest of the share holders. Such exercise of discretion, by the Board of Directors, is not liable to be questioned by a shareholder or a transferee, nor liable to be canvassed against, in the present proceedings. The petition should be dismissed. 3. On behalf of the petitioner P.W. 1 was examined and Exts. A-1 to A-13 were produced and marked. On behalf of the 1st respondent R.W. 1 was examined and Exts. B-1 to B-18 were produced and marked as Exhibits. 4. I heard Mr. T. L. Viswanatha Iyer, counsel for the petitioner and Mr. C. M. Devan, counsel for the 1st respondent in the matter. 5. Ext. A-1 is the memorandum of the Articles of Association of the 1st respondent company. For the purpose of this case it will be sufficient to note Art.4, 33, 34, 35, 36, 39, 40 and 41. They are as follows: "4. The Company shall be a Private Company and accordingly the following provisions shall have effect namely:- (a) The number of the members of the Company (Exclusive of the persons in the employ of the Company) shall be limited to 50, but where two or more persons hold one or more shares in the Company jointly, they shall for the purpose of this paragraph be treated as a single number. (b) No invitations shall be issued to the public to subscribe for any shares or debentures of the company. (c) The write (? right) to transfer shares shall be restricted in manner herein after set forth. 33. (b) No invitations shall be issued to the public to subscribe for any shares or debentures of the company. (c) The write (? right) to transfer shares shall be restricted in manner herein after set forth. 33. No share holder shall transfer, mortgage, or create any interest with reference to his shares in this Company without the consent of a majority of the Directors and even if one member sells or transfers or creates any interest, it shall be only in favour of one or more members of this Company. 34. A share may be transferred to a member selected by the transferor but save as aforesaid and as provided for by the articles hereof no share shall be transferred to any person who is not a member so long as any member is willing to purchase the same at a fair value which shall be determined by a general meeting of the shareholders. 35. Except where the transfer is made in pursuance to Art.33 and 42 - thereof the person proposing to transfer any share shall give notice in writing to the Company that he desires to transfer the same. Such notice may state the sum he fixes as the fair value and shall constitute the Board of Directors as his agent for the sale thereof at the price so fixed or at the option of the purchaser at the fair value ascertained in the manner hereinafter set forth. 36. If the Directors within three months after being served with notice find a person or a member willing to purchase the same they shall give notice thereof to the proposing transferor and he shall be bound upon payment of the stipulated money, to transfer the share to the purchaser within seven days of the last mentioned notice and the purchaser shall be bound to complete the purchase. 39. If the Directors shall not within three months after being semi with the first mentioned notice find a person or a member willing to purchase the shares and give notice in manner aforesaid, the proposing transferor shall at any time thereafter sell and transfer the shares to any person at any price. Then the company shall enter the name of such I purchaser in the register. 40. Then the company shall enter the name of such I purchaser in the register. 40. The Directors may at their own absolute and uncontrolled discretion decline to register any transfer of shares by a shareholder who is indebted to the Company or upon whose shares the Company have a lien or otherwise, or any transfer to any person not approved by them, and in no case shall a shareholder or proposed transferee be entitled to require the Directors to state the reason of the refusal to register, but their refusal shall be absolute, and shall not be liable to be questioned. 41. Every instrument of transfer shall be in writing and signed by the transferor and transferee and in the case of share held by two or more joint holders, or to be transferred to the joint names of two or more transferees, by all such joint holders, or by all such transferees as the case may be and must be left at the office of the Company to be registered, accompanied by the certificate for the shares to be transferred and by such evidence as the Directors may reasonably require to prove the title of the transferor, and a fee of two. rupees or such other sum as the Directors shall from time to time determine must be paid to the Company for the registration of every such transfer, upon payment thereof the Directors subject to the powers vested in them by Article 40 shall register the transferee as a share holder and retain the instrument of transfer, but the transferor or the transferors as the case may be shall be deemed to retain the holder or holders of such share until the name or names of the transferees is or are entitled in the Register of Members in respect thereof." 6. As stated, the 1st respondent is a Private limited company. It is what is sometimes called "a close Corporation". The transfer of shares therein are subject to the restrictions contained in the Articles of Association of the Company which is a contract governing the relationship between the members. The discretion of the Directors in the matter of registration of transfers in a private limited company has been lucidly stated in Palmer's Company Law 23rd Edn. The transfer of shares therein are subject to the restrictions contained in the Articles of Association of the Company which is a contract governing the relationship between the members. The discretion of the Directors in the matter of registration of transfers in a private limited company has been lucidly stated in Palmer's Company Law 23rd Edn. (1982) at page 481 as follows: "Where a discretion as to registering transfers is given by the articles to the Directors, the court will not control the exercise of this discretion, unless it is proved that the directors are not exercising it bona fide; in other words, that they are acting oppressively, capriciously, or corruptly or in someway mala fide. In Re Smith and Fawcett Ltd., the court would not find mala fides where, on the death of a member who held half the company's shares, the surviving director, who held the other half of the shares, refused to register the executors except in respect of part of the holding and upon condition that the balance be transferred to himself. It is common for articles to provide that the directors shall have the power of declining to register a transfer without assigning any reason therefor; or in their absolute and uncontrolled discretion; or in some equally sweeping terms; in such a case the court will not draw unfavourable inferences against directors because they do not give their reasons for refusing to pass a particular transfer, for they arc under no obligation to disclose their reasons either in court or out of court; it is enough that they have in fact considered the transfer, and that in the exercise of the discretion given to them by the articles they have not passed it. If the directors choose to give their reasons, the court will then consider whether they are legitimate or not." In Mathew Michael v. M/s Teekoy Rubber (India) Ltd. ILR 1981 (2) Kerala 189 after a review of the relevant decisions of the Supreme Court and other Courts, my learned brother M. P. Menon, J. has observed as follows at page 194. " The jurisdiction conferred by S.155(3) is wide and comprehensive, and I am in respectful agreement with the view taken in Gulabrai's case [ (1978) 48 Comp. Cas. 438] that it is not summary. 7. " The jurisdiction conferred by S.155(3) is wide and comprehensive, and I am in respectful agreement with the view taken in Gulabrai's case [ (1978) 48 Comp. Cas. 438] that it is not summary. 7. The fact however remains that irrespective of the nature of the jurisdiction, courts have been reluctant to interfere with the decision of Directors in the matter of registering transfers, where the articles of association confer them an absolute discretion. Decided cases show that the power to refuse to register a transfer is always presumed to have been exercised bona fide, and that unless the articles otherwise provide, the Directors are not bound to disclose their reasons. The presumption will be replaced when a petitioner positively proves that the power has been used without bona fides i.e., when he succeeds in showing that the Directors have acted "oppressively, capriciously or corruptly or in some way mala fide. " At page 196 the learned Judge held: " The memorandum and articles of association of a company bind the company and shareholders, and where such a binding contract invests the Directors with discretion to refuse to register transfer of shares without assigning reasons, the Directors can rest on the contract and refuse to disclose their reasons; and in view of the contract again, the shareholder also cannot attack the exercise of discretion, unless it be on grounds of equity and breach of trust. The contract will be enforced and the Directors relieved of the duty to disclose, so long as it is not shown affirmatively that the power is exercised capriciously, wantonly, or oppressively." Proceeding further in paragraph 8 at page 196 the learned Judge observed: "But the Regulation clearly provides that the Directors are not bound to disclose any reason for disapproving of the transferee. Of course, if they disclose the reason, the court can go into the question whether they are good reason i.e. reasons in law. But where no such disclosure is made, the authorities seem to take the view that the court will not compel them to make a clean breast of it, in rectification proceedings. The presumption is that the directors have acted bona fide, and the burden of displacing it by cogent evidence will be on the complaining transferee. " In Balwant Transport Co. Ltd. v. R. H. Deshpande AIR 1956 Nag. The presumption is that the directors have acted bona fide, and the burden of displacing it by cogent evidence will be on the complaining transferee. " In Balwant Transport Co. Ltd. v. R. H. Deshpande AIR 1956 Nag. 20 speaking for the Division Bench, Hidayatullah, J. (as he then was) said: "It is well settled that the onus is on the shareholder to prove that the action of the Directors in refusing to register transfer of share was mala fide. " It was further held as follows (as extracted from the head-note) : "Where the Articles of Association of a private company confer on the directors an absolute and uncontrolled discretion to refuse to register my transfer of a share whether fully paid or not, where in the opinion of the directors it is not to the interest of the Company to admit the proposed transferee to membership or (if he is already a member) to allow him to increase his holding, and the directors in the exercise of that discretion refuse to register a transfer of a share, then unless it can be shown that a power so vested in them was exercised mala fide or for any collateral purpose, the Court cannot overrule the decision of the directors and substitute its own judgment about the desirability of bringing the name of a person as a shareholder in the register." It is also important' to note in this connection, that the conditions imposed or the formalities enjoined in connection with the transfer of shares as provided in the relevant Articles of Association read with S.108 of the Companies Act are mandatory. Failure to strictly comply with the same is fatal. This follows from the decision of the Supreme Court in Mannalal Khetan v. Kedar Nath Khetan AIR 1977 SC 536 . 6. In the light of the above principles of law and the relevant articles of association of the 1st respondent Company let us consider how far the petitioner is entitled to the relief prayed for in the company application. It is the definite case of the 1st respondent in paragraphs 13, 14 I and 16 of the counter affidavit that the petitioner had not sent along with his letter dated 19th November 1982, Ext. A-7, the share certificates which were sought to be transferred, nor had he remitted Rs. It is the definite case of the 1st respondent in paragraphs 13, 14 I and 16 of the counter affidavit that the petitioner had not sent along with his letter dated 19th November 1982, Ext. A-7, the share certificates which were sought to be transferred, nor had he remitted Rs. 2 to the company for transfer, as enjoined by Article 41 of the Articles of Association. The petitioner did not deny this by filing a replication. On the other hand, after the arguments were heard in this case on 12th June 1984 and judgment was reserved, the petitioner filed company application No. 157 of 1984 on 18th of June, 1984 (dated 16th of June 1984) I praying for an order that this court may be pleased to receive the share certificates produced and described in the schedule and also demand draft for Rs. 2 for compliance with Art.41 of the memorandum of the Articles of Association of the 1st respondent company, condoning the delay, if any, in producing the same. It cannot admit of any doubt (it is practically conceded) that the mandatory requirement of Art.41, has not been complied with by the petitioner, when he applied for the transfer of shares in his name. The share certificates and the registration fee of Rs. 2 were not filed along with the application requesting for the transfer to be made. Art.41 of the Articles of Association read with S.108 of the Companies Act enjoins that along with the transfer application, the certificate for the shares to be transferred and fee of Rs. 2 should be left at the office of the company. Admittedly this has not been complied with. If so, the 1st respondent is well justified in rejecting the transfer application. Ext A-9 (B-8) communication is valid, legal and proper. In view of the decision of the Supreme Court reported in Mannalal Khetari's case AIR 1977 SC 636 the non compliance with the provisions of Art.41 of the Articles of Association read with S.108 of the Companies Act, is fatal. The petitioner is not entitled to any relief as prayed for in this petition since it should be held that he has not made a proper transfer application in the eye of law. The belated application filed in this court, C.A. 157 of 1984, praying that this court may receive the share certificates and also the demand draft for Rs. The petitioner is not entitled to any relief as prayed for in this petition since it should be held that he has not made a proper transfer application in the eye of law. The belated application filed in this court, C.A. 157 of 1984, praying that this court may receive the share certificates and also the demand draft for Rs. 2 in compliance of Art.41 of the Articles of Association, condoning the delay if any, caused in the matter, is not maintainable. It is for the petitioner to comply with all the conditions and stipulations contained in the Articles of Association, at the time of filing the application, before the 1st respondent. Having failed to do so, it is not open to the petitioner to file a belated application in this court and that too after the entire arguments in the case was over. The 1st respondent has taken this objection specifically at the earliest opportunity at the time of filing the counter affidavit. For reasons best known to him, the petitioner did not comply with Art.41 read with S.108 of the Companies Act at the appropriate time. The non compliance is fatal. It cannot be cured by filing the share certificates and the demand draft, in this court and in these proceedings. This court has no jurisdiction either to accept the documents and the fee. I hold that company petition No. 4 of 1983 is not maintainable and deserves to be rejected for failure to comply with the mandatory requirements of law as enjoined by Art.41 of the Articles of Association read with S.108 of the Companies Act. It is a condition precedent for getting the shares transferred, that the instrument of transfer should be executed by the transferor and the transferee, and it should be left at the office of the company to be registered, accompanied by the certificates for the shares to be transferred and the fee of Rs. 2. The Directors are obliged to consider only a valid application filed in accordance with law under the Articles of Association. The petitioner has obviously not filed such a valid application at all which is a condition precedent to enable the Directors to consider an application and register the transfer of shares. 2. The Directors are obliged to consider only a valid application filed in accordance with law under the Articles of Association. The petitioner has obviously not filed such a valid application at all which is a condition precedent to enable the Directors to consider an application and register the transfer of shares. On this short ground, the jurisdiction of this Court under S.155(2) of the Companies Act itself is not property or validly invoked by the petitioner, nor attracted. I hold that the Company petition filed is misconceived and should fail. 7. On the merits, it should be stated that the Directors of a private limited company have got a very wide discretion in the matter of registration of transfers. It has not been proved in this case by the petitioner that the Directors failed to exercise the discretion vested with them bona fide or they acted oppressively, capriciously or corruptly or mala fide. In the absence of a plea and proof in that behalf as stated in Palmer's Company Law, 23rd Edn at page 481, quoted in para 6 supra, this petition is not maintainable. The decision reported in Balwant Transport Co. Ltd. case AIR 1956 Nag. 20 is also to the same effect. In this case there is no allegation or proof on that score. On this ground also, this petition is not sustainable. The main plank of attack was based on the basis of rights of the petitioner on an interpretation of Article 39 of the Articles of Association. That is separately considered in the following paragraphs. 8. Petitioner's counsel argued that Art.39 of the Articles of Association applies to the instant case. A notice as envisaged therein was given to the 1st respondent as per Ext. A-4 (B-3), dated 14th February 1982. The Directors should within three months thereafter find a person or member willing to purchase the shares. In this case the Directors have not done so till 14th May 1982. Thereafter the company has no option but to enter the name of the purchaser in the register. Art.39 is absolute in its terms in that regard. So, the petitioner is entitled to have the relief and the company shall enter the name of the petitioner as purchaser of the shares in the register. 9. The argument of the petitioner that Article 39 applies to the instant case should fail for more reasons than one. Art.39 is absolute in its terms in that regard. So, the petitioner is entitled to have the relief and the company shall enter the name of the petitioner as purchaser of the shares in the register. 9. The argument of the petitioner that Article 39 applies to the instant case should fail for more reasons than one. P.W.I states that Ext. A-4 (B-3), dated 14th February 1982 was delivered to R.W.1 at his residence by him, in person, the next day. He did not obtain an acknowledgment therefor. In the counter affidavit, filed by the 1st respondent it is stated that Ext. A-4 (B-3) was received in the office only on 24th September 1982. R.W.1 has also categorically affirmed this during his examination. Nothing has been brought out in the case to disbelieve or to discard the testimony of R.W. 1 in this regard. As to when Ext. A-4 or Ext. B-3, dated 14th February 1982 was delivered to the company is a matter depending entirely on oral evidence; whereas P.W. 1 would have it that it was delivered the next day at the residence of R.W. 1, R.W. 1 categorically states that it was received by the company only on 24th September 1982. This was stated in paragraph 3 of the counter also. I had occasion to watch the demeanour of both P.W.1 and R.W.1 while in the box, when they were examined. I should state that the evidence of R.W.1 impressed me. His answers were spontaneous and straightforward. He appeared to me, to be a respectable person, speaking the truth. On the other hand, P.W.1 was on many occasions evasive in his answers. I have no hesitation to accept the testimony of R.W.1 when, he states that Ext. A-4 (B-3) was seen by him or received in the office only on 24th September 1982 in preference to the testimony of P.W.1 false believe R.W.1 when he states that Ext. A-13, dated 29th July 1982 was not received by the 1st respondent company at all. In the case of Ext. A-13 also, the petitioner has not obtained any acknowledgment. It is difficult to believe that for delivery of such important communications, Ext.A-4 (B-3) and Ext. A-13, any reasonable person would ordinarily fail to obtain acknowledgments. On these premises, it follows that three months have not elapsed when the petitioner filed Exts. A-7, dated 19th November 1982, along with Ext. A-13 also, the petitioner has not obtained any acknowledgment. It is difficult to believe that for delivery of such important communications, Ext.A-4 (B-3) and Ext. A-13, any reasonable person would ordinarily fail to obtain acknowledgments. On these premises, it follows that three months have not elapsed when the petitioner filed Exts. A-7, dated 19th November 1982, along with Ext. A-6 (B-6), for the transfer of shares in his name. The 1st respondent company had time till 24th December 1982. Art.39 of the Articles of Association will not enable the petitioner to get his name registered as the purchaser. It should be noted that within three months of the receipt of Ext. A-4 (B-3), by the 1st respondent company, the transferor (2nd respondent) has sold and transferred the shares to the petitioner. The 1st respondent company should find a person only within three months after the receipt/service of Ext. A-4 (B-3) on 24th September 1982. It is only at any time, thereafter, the proposed transferor shall sell and transfer the shares to any person, at any price. It is only then the company shall enter the name of such purchaser in the register. None of these requirements are satisfied in this case, obviously. No right flows to the petitioner by virtue of Art.39 of the Articles of Association. Reliance placed on Art.39 of the Articles of Association is misconceived and is to be rejected. I hereby do so. 10. Even otherwise, I am of opinion that the construction placed on Art.39 of the Articles of Association by the petitioner's counsel is not logically in accord with the well settled principles of construction of statutes and deeds. In my opinion Art.33, 34, 35, 39, 40 and 41 should be considered together, and should be construed reasonably. It is only after the instrument of transfer along with the certificates of shares to be transferred and the fee of Rs. 2 are delivered or left at the office of the company duly, the Directors should consider the matter, subject to the powers vested in them under Art.40. Under Art.40, the discretion of the Directors is absolute and uncontrolled. The discretion to decline the request for the transfer of shares is uncontrolled. The refusal shall be absolute and shall not be liable to be questioned. It is obvious that Art.39 should be read along with Art.41 of the Articles of Association. Under Art.40, the discretion of the Directors is absolute and uncontrolled. The discretion to decline the request for the transfer of shares is uncontrolled. The refusal shall be absolute and shall not be liable to be questioned. It is obvious that Art.39 should be read along with Art.41 of the Articles of Association. In that view it will be subject to Art.40, which has an overriding effect. In other words, Art.39 itself is subject to Art.40 of the Articles of Association. Art.40 will prevail under any circumstances. The reasons or the circumstances which resulted in the decision of the Directors declining to register any transfer of shares shall not be questioned. The decision of the Directors shall prevail. So considered, I am of opinion that the 1st respondent being a private limited Company, whatever may be the reason for rejection of the transfer of shares or under whatever circumstance it so resulted, the petitioner is not entitled to question the same. The action of the 1st respondent in rejecting the transfer application filed by the petitioner is well justified on the merits. Reliance placed on Art.39 of the Articles of Association is mis-placed. In this view of the matter also, the company petition deserves to be dismissed. 11. For the reasons stated above, C.P. No. 4 of 1983 is dismissed with costs.